“The fourth annual Future of E-commerce in FMCG study shows that e-commerce now accounts for 4.6% of all FMCG sales. Whilst the e-commerce channel is growing, the FMCG market as a whole is sluggish, increasing just 1.3% during the same period. Our projections show that in 2025, online FMCG will be a USD 170 billion-dollar business and hold a 10% market share.”

Key findings from the report include:

Global hotspotsIn terms of absolute value growth, the top six contributors are all leading power economies, led by China and the US. The other top performing countries are South Korea, the UK, Japan and France. Last year, value increased by 52% in China, 41% in South Korea, 8% in the UK, 7% in France and 5% in Japan and in the US.

However, the online grocery sector is also expanding into new markets. There has been significant value growth, for example, in Thailand (+104%), Malaysia (+88%) and Vietnam (+69%) where e-commerce is in early stages.

EuropeEurope remains a continent divided. With 5.6% value share in 2016, it is the second largest market in the world for e-commerce following Asia. However, while the UK and France remain on the front foot for e-commerce – with 7.5% and 5.6% market share respectively – Germany (1.7%) and the Netherlands (2.6%) are lagging behind.

Furthermore, there are signs that e-commerce is slowing down in Europe. Mature markets like France and the UK – while still evolving – are doing so at a slower rate.

USAKnown for its attachment to large format hypermarkets, online grocery penetration has increased rapidly in the US in recent months, reaching 30% of the total population. Annual spending on food and alcohol through e-commerce is this year predicted to reach $20 billion.

Latin AmericaThere has been a slight increase in online grocery spend in Latin America over the past 12 months. The lack of trust in payment methods coupled with the overwhelming popularity of discount formats makes Latin America one of the most difficult regions for brands to succeed in the online world.Throughout most of Latin America, e-commerce is lagging far behind traditional methods of shopping. The exception to this is Argentina, where e-commerce is exceeding usage compared to the rest of the region.

MegacitiesMegacities have become natural breeding grounds for e-commerce. For example, in London, Beijing and Shanghai, e-commerce accounts for 10% of the FMCG market.

Incrementality“We know that e-commerce is still cannibalising offline purchases. However, there is growing evidence that online formats – in isolation – are no longer the best option for winning share. It´s about how online and offline work together to create a better shopper experience,” says Stéphane Roger.

2025 ForecastKantar Worldpanel projections show that by 2025, online FMCG will be a USD 170 billion-dollar business, and hold a 10% total market share.

South Korea and China will continue to lead the way, and Asia in general remains at the cutting edge of online adoption. The big global uplift will come from the USA, predicted to rise from a 1.5% e-commerce share in 2017 to 8% in 2025. This can be attributed to the successful rollout of click-and-collect, delivery and subscription models, and the acceleration of disruptive models.

By 2025, online FMCG will be a USD 170 billion-dollar business, and hold a 10% total market share.